Wall Street is set for a quieter start to the new year, with markets easing from 2025 into 2026 amid light trading and few major catalysts.
US markets will be closed on Thursday for New Year’s Day, breaking up the week and likely keeping volumes thin. With no Federal Reserve speakers scheduled and a sparse economic calendar, investors may find limited reasons to make big moves.
The main event will be Tuesday’s release of the minutes from the Fed’s December policy meeting, when policymakers cut interest rates by 25 basis points. Markets will be looking for insight into how much debate there was behind that decision.
“With Thursday’s New Year’s Day holiday breaking up the week, there will only be a smattering of economic data to pay attention to as well as the minutes to the December FOMC meeting on Tuesday,” Deutsche Bank analysts wrote. “With respect to the latter, we will be looking for any information that helps to define the contours of the policy disagreements amongst the Committee.”
Those disagreements were notable, with three dissents at the meeting — two officials preferring to hold rates steady and one arguing for a larger cut. Fed Chair Jerome Powell emphasized a “wait and see” approach, while signaling that risks in the labor market may now outweigh inflation concerns.
Since then, economic data have tilted somewhat dovish, with unemployment edging higher and inflation coming in softer than expected, though Deutsche Bank cautioned that some of the weakness may reflect temporary distortions. That makes January’s jobs and inflation reports key ahead of the Fed’s late-month meeting.
This week’s data slate is thin. Investors will see pending home sales on Monday, Chicago PMI on Tuesday, and weekly jobless claims on Thursday, though analysts warn holiday effects can skew the claims numbers.
Markets will also be watching whether the Santa Claus rally can regain momentum. While the seasonal pattern faltered late last week, the S&P 500 remains on track to end 2025 with another year of double-digit gains.
“In short,” Deutsche Bank said, “barring any unforeseen developments, the week’s data should allow for a relatively calm transition from the old year to the new.”